Headlines: Glaxo Settles Cases with United States for $3 Billion

By Robert A. Schwartz

The media reported recently that the British drug company GlaxoSmithKline (“Glaxo”), the fourth largest drug company in the world, announced that it had agreed to pay $3 billion to settle United States government civil and criminal investigations into its sales practices for numerous drugs. Glaxo agreed to pay money to resolve these investigations into its illegal marketing practices, which included payments to doctors and manipulation of medical research to promote the drugs in question. Two points need to be made:
1. None of this money or any part of it will be used to compensate the seriously injured, innocent victims of the drug company’s illegal marketing practices; and
2. $3 billion is only 16.6 percent of Glaxo’s annual $50 billion revenue.

Since $3 billion is such a small percentage of Glaxo’s $50 billion annual revenue, it is not likely to have any effect on Glaxo’s corporate culture. Then again, not much ever has or ever will. Glaxo is neither the first worldwide pharmaceutical company to get into this kind of trouble, nor is it Glaxo’s first time getting into this kind of trouble. And it will not be Glaxo’s last. Glaxo’s arrogant zeal to make $50 billion a year from one drug easily overrode any corporate conscience that ever may have existed.

These fines do not hurt the drug companies. Fines, like jury verdicts, do not affect their bottom line, and no one gets laid off or fired. Fines are just part of the way they do business. They push the ethics envelope as far as they can until they get caught; then they apologize, pay a fine and get right back to their kind of business as usual. They downplay and minimize their egregious conduct and get back on message as soon as possible. Bayer did this not too long ago when it was caught hiding scientific evidence from the FDA. That scientific evidence was a Canadian clinical study that found its potential blockbuster drug, Trasylol, could be linked to a higher risk of death than other drugs. When the study came to light, it moved the director of the FDA’s Office of New Drugs to state that the “FDA cannot identify a specific patient population where we believe the benefits of using Trasylol outweighs the risk.” Bayer explained away its conduct as “regrettable human error.” (See my blog post on Bailey & Galyen’s PINJURY.COM entitled Regrettable Human Error)

So, what about the seriously injured innocent patients? They do not receive any portion of the fine. They have to seek their compensation on their own through protracted and uncertain litigation. Victims have to deal with state and federal laws that bar certain types of actions and limit the amount and type of damages they can recover. Where the government has the unbridled ability to levy uncapped fines against these bad corporate citizens for their egregious conduct, victims have a minefield of roadblocks and obstacles to overcome just to maintain their lawsuit, long before they have a seat at any bargaining table. The government can impose arbitrary fines for egregious conduct without having to prove anything, unlike patients who have to prove the exact same thing by such rigid evidentiary standards as the preponderance of the evidence, clear and convincing evidence and beyond a reasonable doubt. Even when the victim’s allegations against the drug company are absolutely true, the drug company denies them and tries every way possible to have the case dismissed and deny the patient fair compensation.

Always remember that the drug companies are the offending parties here, and that they need to be punished. Their egregious acts are calculated and intentional, and they seriously injure and kill innocent consumers.